A betting market is a platform or network where traders place bets on the outcome of an event, with prices reflecting the collective wisdom and expectations of all market participants. Prices are typically defined in terms of odds or probabilities, which are implied probabilities inferred by the collective betting market at a particular moment in time.

The betting market is considered an efficient mechanism for aggregating information about the probability of various outcomes, as prices are constantly adjusting to reflect new information and changing expectations about the event. However, the implied probabilities derived from the betting market are not necessarily the same as the true probabilities of an event due to factors such as liquidity, transaction costs, and market manipulation. Trading in a betting market involves intentional risk-taking and the pursuit of profit through the exploitation of market inefficiencies and mispricings, with success depending on the trader's ability to understand and anticipate the behavior of other market participants. The functioning of a betting market is also influenced by various behavioral biases and heuristics that affect the decision-making of market participants, which can lead to market inefficiencies and mispricings. Ultimately, the success of individual traders depends on their ability to navigate this environment and make profitable trades based on their assessment of the betting market and the behavior of other traders in it.

People come to a betting market to intentionally trade expectation, risking their capital through the placing of a bet on the outcome of an event. Quoted betting market prices, until such time as the event ends, are disputed, and are there to be shot at at any particular moment in time. The nature of the relationship between the trader and the betting market environment is conditional because of the unavoidable interaction that takes place with other traders. A trader believes that a particular betting market price exisitng at a particular moment in time represents value (for if it did not why would he bother to trade at at the price), and there is always someone who sells to him in the belief that he is misguided.

There are a number of characteristics which are pertinent to all betting markets; betting market participants display a preference for risk; there are competing heterogeneous beliefs at work; people display behavioural biases and they misestimate probabilities and often isattribute causation and intention; participants have varying levels and types of knowledge and market power is ultimately held by insiders (contributing to a systematic difference in the betting behavior of serious and casual bettors); outcomes are publicly observed at a prespecified time.

It is important to view betting markets from many perspectives. You cannot, for example, explain how a betting market works without diving into the behavioural details of those that trade in it. A liquid betting market is defined as being a complex environment (heterogeneous dialectics/various stories struggling for domination and complex inter-dependencies between traders). It is a place in which people with compromised information processing skills quickly become emotionally over-whelmed - a disconnect occurs between affect, thoughts and thinking. In order to trade (and after all that is whay people are in the market) people must firstly engage with the prices that are on offer at the particular moment in time that they have choosen to trade. The problem, and it is a considerable one, is that to a man people are trading on the back of incomplete information and accordingly they will suffer from a signal extraction problem - what information does the prices that are on offer at that particular moment in time actually contain? Second, in order to trade people must also choose between having faith in their own beliefs or, they have to decide to have faith in the beliefs of others (the curse of cursedness). Because indifference is never an option - we must choose one of these two options if we are to perform a trade. Traders who are guilty of a wishful and unfounded belief in their own mastery will more often that not succumb to a pre-emptive and premature imposition of patterns on the available data. Traders who doubt their own opinion when confronted with complexity, become insidiously defensive and rush to embrace the concensus (information cascades/herding) - a flight into the so-called intelligible.

Until the event is terminated the betting market throws up a myriad of ever-changing interactions between market participants. Most of those trading in the betting market are trading on the back of incomplete information; assymetric information flows are the order of the day; numerous constraints (cognitive and otherwise) persist; beliefs and assumptions are not updated in the face of new information. Strong emotions drive attentional focus. Dysregulated dopamine function drives aberrant salience attribution. Stress, induced by financial and temporal constraints contributes to deficiencies in critical and rational thinking - people display an impaired ability to think about thoughts and emotions. Prior expectations attenuate the discovery process. Under conditions of stress people resort to using heuristics.

The main causes of sub-optimal decision making in intersubjective betting market environments are; 1. Overconfidence: refusing to accept that others might know more than you do. 2. Herding Behaviour; throwing ones lot in with the crowd. 3. Confirmation Bias: Only seeking information that supports ones beliefs. 4. Anchoring Bias: relying too heavily on the first piece of information encountered. 5. The sunk cost fallacy; framing effects and loss aversion.